As major U.S. banks, including JPMorgan Chase and PNC, propose hefty fees for consumer data access, and the the US Consumer Financial Protection Bureau has not yet decided on the matter, Plaid agrees to pay an undisclosed fee amount to JPMorgan in an extension of their data access agreement.
Fintech provider Plaid has renewed its data-sharing deal with JPMorgan Chase, now adding a set pricing structure for consumer data access.
Both companies committed to keeping customer data available in a safe, secure, and reliable way going forward. While they confirmed that fees are part of the agreement, the amount wasn’t disclosed. Plaid noted that existing customer contracts and pricing remain unchanged.
Plaid’s agreement to pay JPMorgan a requested fee sets an important precedent in the long-running debate over consumer data access in the US. For the first time, one of the largest U.S. banks has successfully pushed a major fintech to pay for data access that was previously free. It signals a possible shift toward banks charging fintechs for the data that powers many apps, as local regulators revisit the rules for open banking.
On one hand, a compromise between the largest U.S. bank and one of the biggest data aggregators in the country will ensure that millions of Chase customers can keep using Plaid-connected services without disruption. On the other hand, many fintech companies might be now prompted to follow the lead.
The sector representatives counter that charging data access fees could stifle innovation and limit consumer choice, especially for smaller startups. Banks, on the other hand, argue that fintechs profit by pulling customer data for free while leaving traditional financial institutions to handle most security risks and costs.
The agreement between Plaid and JPMorgan comes at a time when the US regulators are still re-examining their open banking rules, originally designed to ban data access fees, while trade groups and banks continue to fight it out in court.
Trade groups including the Financial Data and Technology Association and the American Fintech Council criticized the JPMorgan-Plaid pact, warning that charging for data could not only hurt smaller startups but also create barriers in seamless financial service access for consumers.
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